TCN.TO WACC - Weighted Average Cost of Capital
The WACC of Tricon Residential Inc (TCN.TO) is 9.1%.
| Range | Selected | |
| Cost of equity | 5.1% - 7.8% | 6.45% |
| Tax rate | 17.9% - 21.3% | 19.6% |
| Cost of debt | 11.4% - 14.9% | 13.15% |
| WACC | 7.8% - 10.4% | 9.1% |
| Category | Low | High |
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.37 | 0.6 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.1% | 7.8% |
| Tax rate | 17.9% | 21.3% |
| Debt/Equity ratio | 1.82 | 1.82 |
| Cost of debt | 11.4% | 14.9% |
| After-tax WACC | 7.8% | 10.4% |
| Selected WACC | 9.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| TCN.TO | Tricon Residential Inc | 1.82 | 1.23 | 0.5 |
| IVQ.U.TO | Invesque Inc | 3.93 | -0.72 | -0.17 |
| KW | Kennedy-Wilson Holdings Inc | 5.7 | 0.68 | 0.12 |
| MAYS | J.W. Mays Inc | 0.05 | -0.11 | -0.11 |
| MEQ.TO | Mainstreet Equity Corp | 0.93 | 0.4 | 0.23 |
| NEN | New England Realty Associates LP | 1.51 | -0.2 | -0.09 |
| NTP | Nam Tai Property Inc | 0.74 | 0.91 | 0.57 |
| SVI.V | Storagevault Canada Inc | 0.54 | 0.77 | 0.53 |
| TPHS | Trinity Place Holdings Inc | 105.99 | 1.62 | 0.02 |
| UK | Ucommune International Ltd | 17.9 | 0.47 | 0.03 |
| Low | High | |
| Unlevered beta | 0.03 | 0.16 |
| Relevered beta | 0.06 | 0.4 |
| Adjusted relevered beta | 0.37 | 0.6 |
TCN.TO's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for TCN.TO:
cost_of_equity (6.45%) = risk_free_rate (3.45%) + equity_risk_premium (5.60%) * adjusted_beta (0.37) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.